REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.                 OF 2008 [Arising out of Special Leave Petition (Civil) No. 19437 of 2006]

U.P. State Electricity Board ..    Appellant

-versus-

Laxmi Kant Gupta .. Respondent

J U D G M EN T

Markandey Katju, J.

1. Leave granted.

2. This appeal has been filed against the impugned judgment and order

dated  20.3.2006  in  Civil  Misc.  Writ  Petition  No.  11078  of  1997  of  the

Allahabad High Court.

3. Heard learned counsel for the parties and perused the record.

4. The writ petition in the High Court was filed against the award of the

Labour Court IV, Kanpur dated 14.11.1996 (annexure P/4 to this appeal).

That award was given on a reference made by the State Government under

Section  4-K  of  the  U.P.  Industrial  Disputes  Act,  1947  regarding  the

termination of service of respondent, Laxmi Kant Gupta from the service of

the appellant.

5. The respondent claimed that he was appointed as Coolie on 16.1.1984

and worked till 15.2.1986, and that his service was then terminated without

complying  with  the  provisions  of  Section  6-N  of  the  U.P.  Industrial

Disputes Act.  The appellant, on the other hand, alleged that the respondent

was never given a regular appointment.   

6. Admittedly, the respondent challenged his termination of service after

a delay of about 10 years by approaching the Conciliation Officer only on

14.9.1995.  The Labour Court observed that no reason has been given for

this inordinate delay of about 10 years in raising this dispute, and on this

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ground the Labour Court denied back wages to the respondent and granted

only re-instatement on the ground that Section 6-N was violated.

7. Learned counsel for the respondent submitted before us that the point

of delay in raising the industrial dispute was not taken by the appellant in its

written statement before the Labour Court, and hence the said point cannot

be urged here.

8. Without  going  into  this  submission  we  are  of  the  view  that  the

impugned judgment of the learned Single Judge of the High Court as well as

the award of the Labour Court  granting re-instatement deserves to be set

aside for the reasons given below.

9. In  U.P. State  Brassware  Corporation  Ltd.  & another vs.  Uday

Narain Pandey JT 2005 (10) SC 344, this Court referred to a large number

of its earlier decisions on the question as to the relief to be granted to the

workman when his  termination  of  service  is  found to  be  illegal.   It  was

noted  that  while  the  earlier  view  of  the  Court  was  that  if  an  order  of

termination was found to be illegal, normally the relief to be granted should

be re-instatement with full back wages.  However, as noted in the various

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decisions referred to in the above decision, with the passage of time it came

to  be  realized  that  an  industry  should  not  be  compelled  to  pay  to  the

workman for  the  period  during  which  he  apparently  contributed  little  or

nothing at all.  This Court after discussing various earlier decisions held that

the relief to be granted is discretionary and not automatic.  It was pointed

out in the aforesaid decision of this Court in U.P. Brassware Corporation

(supra) that a person is not entitled to get something only because it would

be lawful to do so.  The changes brought out by the subsequent decisions of

this Court, probably having regard to the changes in the policy-decisions of

the government in the wake of prevailing market economy, globalization,

privatization  and  outsourcing  was  evident.   Hence now there  is  no  such

principle  that  for  an illegal  termination  of  service the  normal  rule  is  re-

instatement  with  back  wages,  and  instead  the  Labour  Court  can  award

compensation.

10. The  same  view  was  followed  by  this  Court  in  Haryana  State

Electronics  Development  Corporation vs.  Mamni AIR 2006  SC 2427

(vide paragraphs 15 to 17).

11. Thus  it  is  evident  that  there  has  been a  shift  in  the  legal  position

which has been modified by this Court and now there is no hard and fast

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principle now that on the termination of service being found to be illegal,

the normal rule is re-instatement with back wages.  Compensation can be

awarded instead, at  the discretion of the Labour Court, depending on the

facts and circumstances of the case.   

12. In the present case, we are informed that the respondent has already

received more than Rs. 7 lakhs.  This has happened because although the

Labour  Court  in  its  award  dated  14.11.1996  only  granted  re-instatement

without back wages, subsequently, as a result  of the interim order of the

High Court in the writ petition filed before it, the workman was granted his

salary instead of re-instatement as an interim measure.  Consequently, as a

result of that interim order he has received more than Rs. 7 lakhs.  Coupled

with the facts that the respondent worked for only 2 years (1984-86) as a

purely temporary employee and the fact that he raised the industrial dispute

before  the  Conciliation  Officer  only after  10  years  of  his  termination  of

service, we are of the opinion that the respondent has already got more than

sufficient compensation in this case.

13. Hence, while we are not inclined to quash the reference order on the

ground of delay, we allow this appeal and set aside the impugned judgment

and order of the High Court as well as the Labour Court to the extent that

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they grant re-instatement to the respondent, and we hold that in this case

compensation should have been granted instead of re-instatement.  In this

case  the  amount  already  paid  to  the  respondent  is  more  than  sufficient

compensation for his illegal termination of service, and no further amount

need to be paid to him.  However, what has already been paid to him should

not be recovered from him.

14. The appeal thus stands allowed.  No costs.

……………………………J. (Altamas Kabir)

……………………………J. (Markandey Katju)  

New Delhi; September 26, 2008

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